Lower prices drive LED lamp uptake in Indonesia

LED lamps are making headway in Indonesia, with overall sales volume reaching over 1.2 million units in 2013, according to a GfK audit report.

GfK did its retail tracking in key cities including Jakarta, Surabaya, Bandung, Semarang, Medan, Makassar, Banjarmasin, and Denpasar. The survey revealed that consumers spent $80 million on around 36 million units of fluorescent, halogen, incandescent, and LED lamps. The compact fluorescent lamps, however, garnered the greatest volume of sales at $66 million, 75 per cent of total market share.

"Compact fluorescent lamps continue to dominate the market but our findings exhibit an apparent trend in the rising take up of LED lamps," observed GfK Indonesia Managing Director Guntur Sanjoyo. "Although LED technology has already been around in the country for several years, it has only recently become a serious contender in the consumer market when key manufacturers started launching product variants that are priced affordably and specified to regular household requirements."

In January last year, a LED lamp was almost five times more expensive than a fluorescent lamp on average. Key manufacturers started reducing its pricing significantly by half and began promoting this lamp technology as a more eco-friendly replacement to compact fluorescent. Although the volume sales contribution was a mere 3 per cent, LED lamps earned a substantial sales value of $8.8 million, contributing 11 per cent to the total lamps market in the country.

"In addition to the lower prices, another successful strategy by manufacturers to help drive consumers adoption was to launch LED lamps which are similarly sized and shaped to the commonly used compact fluorescent lamps," highlighted Sanjoyo.

The Indonesian market has attracted many new brands in a bid to tap into the growing demand. In the first quarter of 2013, GfK recorded 27 LED lamp brands with a total of 138 SKUs being sold. The number then expanded by about 70 per cent by the last quarter of the year. To date, there are more than 46 international and local brands with approximately 237 SKUs.

"As awareness of environmental issues intensifies and the global need to reduce energy consumption becoming more pressing than ever, LED technology has become the solution offered by lamp manufacturers' to reduce carbon footprint at household, if not personal level," commented Sanjoyo.

"With the current penetration still at a low level, we can anticipate demand for LED lamps in the country to grow at a healthy pace moving forward with the market turning in a decent growth in the next one year," Sanjoyo concluded.

What does LED stand for?
Light emitting diode (LED) is a display or lighting technology used in electrical and electronic products. May also be used in multimode fibers, optical mice and laser-class printers.